Start-ups seeking external investment rate personal chemistry and trust as the most important factors when it comes to deciding on an investor, while finding someone with an understanding of their product and vision is hugely important, according to research conducted by UK Innovation Hub and Tech City UK.
Access to further funding and a great investor track record are also key considerations, while the add-ons many provide, such as free office space and pitch training, are mostly a pretty low priority. A low-maintenance relationship is also important for over two-fifths of start-up founders.
"These founders are dead-on,” says Matt Lerner, Venture Partner at 500 Startups. “Taking money from a VC is like a 10-year marriage. It really has to come down to trust and chemistry. That's why it's great to reference check your VCs before you take their money.”
Start-ups are also looking to learn more about other start-ups in their space (68% of those surveyed) and information on new funds (65%). Advice from investors is also of interest to a majority of founders (57%).
And where does that investor money end up? Customer acquisition (27% of respondents) and product development (26%) are the standout uses of investment, followed by talent (19%). And on the subject of the latter, programming skills are in demand, with front-end and back-end developers the most challenging hires for new businesses (47%).